SMM5 March 29: this week, the spot price of domestic magnesium ingots is relatively stable, with only small fluctuations. On Monday, due to the news that several factories in the upper reaches were shut down and overhauled, upstream producers temporarily occupied a dominant position, so the trend over the weekend continued to rise slightly. The mainstream factories in Fugu area quoted 13,200 yuan / ton, the mainstream transaction price was 13,100 won, 13200 yuan / ton, and the mainstream factory price in Wenxi area was 13500 Mel 13600 yuan / ton. However, due to the small overall trading volume of the market, the downstream did not actively purchase as a result of upstream production reduction and price increases, and held a wait-and-see attitude and lack of price support, so after prices temporarily stabilized on Tuesday and Wednesday, some magnesium ingot manufacturers began to cut prices on Thursday. as of this Friday, the mainstream transaction price of factories in Fugu area was 13050 RMB13100 / ton, while that of Wenxi was 13400 yuan / ton, which remained basically unchanged compared with last weekend.
In terms of production, a number of magnesium ingot production plants in the upper reaches began to stop production and maintenance this week. Due to the hot weather and the current slump in the magnesium ingot market, the upstream factories have a tendency to overhaul ahead of schedule this year. According to SMM, factories that have stopped production for overhaul have no plans to resume production immediately after maintenance, but they still have to arrange for resumption of production according to domestic and foreign market conditions and downstream demand conditions; several factories that have not yet stopped production have also revealed plans to carry out maintenance in early June one after another. Ferrosilicon prices rose 100 yuan per ton this week, due to ferrosilicon early production reduction, insufficient operating rate, and near the end of the month downstream steel plant bidding demand increased, so ferrosilicon prices hit bottom rebounded, and magnesium ingot production costs also increased accordingly, superimposed the current general trend of production reduction, magnesium ingot supply contraction, so the upstream bid will is strong, even if the overall transaction this week is weak, the price is also relatively strong.
On the demand side, according to SMM, the trading volume of magnesium ingots this week is lower than that of last week. Recently, the RMB exchange rate has changed rapidly, with the US dollar against the offshore RMB reaching 7.19 on Thursday. Some traders have reported that exchange rate fluctuations have also caused certain pressure on exports, foreign orders have been underpriced, and domestic traders have accepted fewer orders. as a result, the number of export orders that are already small has been further reduced.
SMM analysis, the current magnesium ingot upstream overall supply contraction, increased production costs, little room for price reduction, and the upstream price will be strong, although the follow-up is still lack of demand for supporting prices, but there will not be a substantial price reduction, it is expected that next week will still be mainly stable, accompanied by small adjustments.